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Table 2 - Sierra Cybernetics pricing and Markup information <br />Technology Speciaity W2 Employee Markup Corp -to -Corp Markup list Hours until Rate Drops to <br />See Note A below (Type 1 Consultants) Identified Resource Markup <br />See Nate B below <br />Proposer round See Note C below 28% Not Applicable <br />Resource <br />Identified See Note D below 9% Not Applicable <br />Resource <br />Note A — <br />Sierra's basic markup consists of corporate overhead rate +general and adminlstrative rate + profit, <br />That amounts to 22%. <br />Note B — <br />Because CKconsultaats require less overhead, we reduce our basic markup on them from 22% to 18%. <br />Note C -- <br />W-2 employees are provided benefits, which costs are additive to our basic markup. We offer W-2 <br />employees three categories sof employment (Types 2,3,4) with varying degrees of benefits, with three <br />different markup percentages. In each case, the billing rate to the client is the same, but the employee. <br />can choose a benefit package that best suits their need with a corresponding difference in their <br />underlying pay rate. Le., selection of lesser benefits results in a higher hourly pay rate, and conversely, <br />to the employee, We describe this arrangement as being "compensation neutral" so that, at the end of <br />the day, the not value to the empicyee is targeted to be the same. <br />Type 2 - No benefits, Sierra only withholds payroll taxes and mays the corporate social security, <br />Medicare, and unemployment insurance costs. Total markup on torr of pay rate is 33% <br />Type 3 — tail ed benefits. Type 2 plus paid leave days plus a stipend toward ernpioyee purchase of <br />medical insurance. Total markup on top of pay rate is 41%, <br />Type 4 — Fuil benefits. Fully -benefited employee with full taxes withheld, full insurance coverage, full <br />paid leave, and access to Sierra's Cafeteria 125 Pian. Total markup on tap of pay rate is 551/1., <br />Note D — <br />We currently utilize this "payroiling" program with one of our other clients, The approach is the same as <br />described under Note C, with the benefit percentages being the same, but the overhead plus C&A plus <br />profit amoun t being only 9%, So, <br />Type 2 marl(up = 20% <br />Type 3 markup = 28% <br />Type 2 markup = 42% <br />` SIERI A <br />CY13ERNETICS Sierra C Fbernptics Proprietary information a December 2016 <br />